HONG KONG/SINGAPORE (Reuters) – Escalating anti-government protests in Thailand might push one among this yr’s worst performing inventory markets even decrease, some traders worry, as political instability provides one other layer of threat to an already fragile tourism-dependent economic system.
Thai shares .SETI had been Asia’s worst performers this week, down 2.6%, as protests hit the capital Bangkok the place tens of 1000’s of individuals defied a ban on demonstrations. [.SO]
Thailand has already suffered a report $8.8 billion in fairness outflows over the primary 9 months of this yr, alternate information reveals, because the COVID-19 pandemic wrecks the travel-exposed economic system and finance and industry-heavy inventory index.
“The principle factor is that it’s going to add to the already damaging sentiment,” stated Jeep Chatikavanij, founding father of the Ton Poh Fund which manages $150 million. “The Thai market is in a sluggish loss of life in the direction of irrelevancy, the protests are only one thing more.”
The protesters have for months been searching for to take away Prime Minister Prayuth Chan-ocha, a former junta chief, and to curb the powers of King Maha Vajiralongkorn.
Prayuth has vowed to remain on and this week issued an emergency decree, prohibiting gatherings of greater than 5 folks.
For a graphic on Overseas investments in Thailand:
On the identical time the economic system has suffered its largest contraction in 22 years, the inventory market has dropped 22% because the begin of the yr and, due partly to a lagging forex THB= it’s among the many worst performers globally in greenback phrases.
That the baht has held up this week reveals that a minimum of some religion in a longer-term restoration stays.
“Resurgence of the anti-government protests is regarding and suggests draw back stress within the brief time period, in addition to a better threat premium in Thai shares than its Asian friends,” stated Nader Naeimi, AMP Capital’s head of dynamic markets.
Nevertheless, he doesn’t assume the current instability will derail the Southeast Asian nation’s restoration prospects.
“For anybody who doesn’t imagine international tourism is lifeless eternally, Thai shares are a fantastic guess on a publish COVID world and an eventual return to journey and leisure actions.”
Reporting by Scott Murdoch in Hong Kong and Tom Westbrook in Singapore. Further reporting by Gaurav Dogra in Bengaluru; Enhancing by Jacqueline Wong